How Profitable Are Coworking Spaces Today?

Because even today, women bring home less income than men overall, coworking spaces with only female members present operators with a greater challenge for profitability. Surprisingly, however, coworking spaces with significantly more male than female members are less profitable than average as well. Those with roughly equal numbers of both genders perform best.

Capital inequality has also an effect on founders’ ability to invest. Men invest more than women in their coworking spaces: in Europe, they invest 2.5 times as much, and in the USA, more than four times as much. That may explain why female-founded coworking spaces have fewer members, are smaller, and — outside Europe, at least — are more likely to be unprofitable.

Income is about as unequal as investment. Coworking spaces founded by men generate about 2.5 times higher income. But when the amount of investment and income are considered together, there is no difference, suggesting that women with the same access to investment capital generate similarly high income and can establish a coworking space that’s just as successful. In other words, on a level playing field, gender does not determine success.

Surprise! Active community building is only a differentiator in large cities

Community building as well as online media activity — social media, blogs, etc. — are some of the most popular activities companies use to attract new members. Are coworking spaces that are active on this front also more profitable? Overall, no significant difference is observed from unprofitable coworking spaces. This is particularly surprising for community building. Only in million-plus-resident cities does active coworking-community building have a positive effect on profitability.

Only two activities stand out as positive, in general. Coworking spaces whose websites are search-engine optimized and those that participate in coworking visa programs are more likely to operate in the black than those that do not. Conversely, unprofitable coworking spaces are more likely than average to advertise or to hold events with other coworking spaces. Especially in the months just after opening — that is, in the phase that’s probably least profitable — these kinds of actions are, however, not uncommon, and are even to be expected.

Profitable coworking spaces are more likely to participate in visa programs

So, how does it looks one year after opening? Among for-profit coworking spaces, those that are clearly more profitable are the ones that take part in visa programs. Also, more profitable coworking spaces work in a coworking association, while the numbers of profitable and unprofitable coworking spaces that engage in SEO activities are the same. Advertising and referral programs are still more popular with unprofitable coworking spaces after a year of operation. Otherwise, no additional activities show an apparent difference between the two groups — with the exception of free trial days and active community building in large cities.

What are the different streams of income that coworking spaces generate? And what types of expenses do they have? Discover these and a wide range of other statistics related to this article in ourfree slide deck.

Get more statistics and support the Global Coworking Survey

Are you looking for a more comprehensive and detailed analysis of the profitability of coworking spaces? Would you like to support the work done on the Global Coworking Survey? Then come right this way.In the report’s seventy-two slides, various factors are highlighted, and charts show whether and how they are related to the profitability of coworking spaces. Since some coworking spaces operate as nonprofit organizations, and particularly since new coworking spaces rarely make a profit from the start, they are taken out of an additional analysis. This additonal example will also illustrate characteristics that differentiate profitable coworking spaces from unprofitable ones. Just look what is included!

The results of this article depict the profitability of coworking spaces relative to certain characteristics of a coworking space. Many results illustrate the strenght of a (linear) correlaton between a characterisc & profitablility. There are also non-linear correlations that can be detected. However, it is important to understand that the characteristics did not necessarly cause the difference.

There's usually no one single characteristic that can affect profitability overall (perhaps, with the exception of number of members); rather, a combination is required for such an effect, and not all can be collected in a quantitative survey. In addition, some characteristics are affected by a broader background that is not related to, but is reflected in the business of running a coworking space. For example the inequality of gender.